Abbott faces huge task in defence report

Plans to buy the American F-35 joint strike fighter will cost the government billions of dollars.
Photo: Reuters

by
Geoffrey Barker

The Abbott government faces daunting strategic, financial, operational and acquisition policy challenges as it starts work on a new defence white paper to be published early in 2015.

It is an anxious time for defence because the Prime Minister does not seem deeply engaged in defence policy issues, despite his evident and uncritical admiration for the armed services, and Defence Minister
David Johnston
has had little public impact so far.

At least
Tony Abbott
and Johnston know that the prospect of a major attack on Australia remains remote, despite the increasing unpredictability of Australia’s security environment with the rise of China, India, and other regional powers, and tensions in ­relations with Indonesia and on the Korean Peninsula.

Now, with Australia’s troop ­deployments to Afghanistan, East Timor and the Solomon Islands ending after more than a decade, Abbott and Johnston have effectively contracted out the management of asylum-seeker boat arrivals to Immigration Minister
Scott Morrison
, who seems intent on trashing Australia’s relations with Indonesia. Johnston’s protest that ­border protection is “a civil public policy problem" is simply absurd: it is frontline navy work supported by ­civilian jailers.

Abbott and Johnston have spent more time recently defending the military from gratuitous Labor insults and kicking the ABC for reporting ­unfavourably on some naval operations than they have on addressing defence policy issues facing Australia. Johnston declared himself “extremely angry" at the ABC reports and in need of “a period of time to cool off". No defence minister should allow himself such self-indulgent emotions.

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The primary focus of the Abbott ­government is now on cutting spending, including defence spending, cutting the size of the public service, kicking trade unions, and ending financial support for manufacturing industries with little regard for the long-term employment, skills and potential national security consequences.

Radical proposal

Framing the new white paper, the Abbott government faces the dilemma that has confronted previous Labor and Coalition governments: the widening multibillion-dollar gap between the funding that is likely to be available to defence over the next few years and the cost of the approved plans for new fighter jets, warships (especially submarines) and army equipment.

In fatuous speeches to the Australian Strategic Policy Institute (ASPI) and the Australian Defence Magazine (ADM) Congress, Johnston pledged “no more cuts" to defence but offered only a vapid pledge, echoing Labor policy, that the total defence budget would start to grow to 2 per cent of gross domestic product “as soon as broader economic circumstances permit". Then, without blushing, his ASPI speech foreshadowed “trimming the bureaucracy". When is a trim not a cut?

To be credible, the new white paper will have to do better: it will have to detail future defence funding plans, including the balance of spending on the current and future forces and in investment, personnel and operating costs. Labor’s two defence white papers were marred by their failures to address these issues credibly.

Abbott’s National Commission of Audit has the job of proposing cuts to defence and other spending – and it has a radical proposal from defence policy guru Emeritus Professor
Paul Dibb
for cutting the size and budget of the Defence Materiel Organisation, which acquires and sustains defence equipment. Dibb has proposed that the DMO staff should be cut from more than 7000 people to about 2000, for savings of almost $600 million a year. It will be a tempting target for the commission.

Dibb has also told the commission that DMO needs to develop “a national defence industry policy which spells out the technological competencies and investments required from industry over the next decade". It is a good idea but has been tried before and the defence landscape is littered with worthy defence industry policy statements that never seem to become reality.

Abbott might reasonably wonder what the loss of automobile and vehicle parts manufacturing might mean for defence in terms of the nation’s future capacity for building, sustaining and repairing high-end military equipment. Another statement of good intentions regarding defence industry will hardly comfort contractors struggling to survive in an era of budget austerity.

Influential players

In fact, the thrust of the new Coalition white paper will not be substantially different from last year’s Labor government white paper. There will doubtless be differences of emphasis and expression to reflect the Coalition’s ownership of the white paper, but Australia’s strategic interests have not changed radically: the US, China, India, Indonesia, North Asia and the Korean Peninsula, and the second world of Papua New Guinea, East Timor and Fiji. Financial constraints will also discourage major changes in policy.

There have already been hot contests to shape the direction of the white paper, with the Prime Minister’s national security adviser,
Andrew Shearer
, a hard-headed defence realist, wielding crucial influence with department secretary
Dennis Richardson
, a security, foreign policy and defence veteran who enjoys wide political respect. Together they seem to have scotched plans by Johnston to appoint Professor
Alan Dupont
and Dr
Ross Babbage
to prominent individual roles in the white paper process.

Instead, the white paper will be supervised by Defence deputy secretary
Peter Baxter
, who is close to Richardson, and advised by an expert panel including
Peter Jennings
and
Andrew Davies
from ASPI, and
Stephan Fruehling
of the Australian National University. Professor Dupont will be offered a place on the committee

Babbage will be part of a defence procurement review to be headed by businessman
Jim McDowell
. In 2011, Dr Babbage controversially proposed that Australia might acquire 10-12 American nuclear attack submarines and develop capabilities to “seriously damage the capacities of China’s leadership to govern" and to “stir serious internal disruptions and even revolts" in China. It remains to be seen whether this startling proposal caused the government to reconsider Babbage’s role given the importance of Australian relations with China.

Clearly the most important and expensive planned defence acquisitions are the proposed construction of 12 new conventional submarines to replace the Collins-class submarines (up to $40 billion), and the American F-35 joint strike fighter and Growler electronic attack aircraft (perhaps $20 billion for both). Both acquisitions would vastly strengthen Australia’s ability to protect the crucial northern and north-western sea and air approaches to the continent. It would be surprising if the white paper did not reconfirm the government’s commitment to these acquisitions even if financial constraints prompted some cutbacks or delays.

A major brawl may erupt over a $10 billion army plan to replace 700 armoured fighting vehicles to enable it, in the words of army chief General
David Morrison
, to defeat “a peer competitor or a potent irregular enemy". Many senior defence officials are appalled at this extravagant proposal to upgrade fighting vehicles at a time of financial austerity when army expeditionary deployments are declining. (See accompanying article).

Within four months the government will have to decide new Defence high command appointments when the defence force chief General David Hurley retires. General Morrison is regarded as a serious contender with astute political instincts and obvious ambition.

The main hope of defence observers and suppliers now is that Johnston will impose clear resource allocation and force structure priorities on the Defence Force, and manage the hard job of defence modernisation in an age of ­strategic uncertainty, limited funds and rising costs.